The Federal Trade Commission held its long-awaited Seattle conference on DRM. As expected, agreement was hard to come by, but the agency made clear that it has had enough of hidden DRM schemes and companies that pull the plug on authentication servers and leave the users who didn't pirate content with nothing.
By Nate Anderson | Last updated March 25, 2009 3:15 PM CT"

A couple of quotes from the article.. please check it out.

"The Federal Trade Commission kicked off its big DRM conference in Seattle Wednesday morning by saying that the goal was not to "take sides" over the question of whether DRM is good or bad—but the conference nevertheless opened with a warning.

Mary Engle, an FTC Acting Deputy Director, began her remarks by warning that those who use DRM had better get serious about disclosing it and the limits that it places on products. She referenced the Sony BMG rootkit debacle, saying that "sellers who use DRM technology to enforce the terms of bargains with consumers need to be particularly careful to disclose in advance" what those bargains are.

And just stuffing the disclosure into the fine print of an End User License Agreement (EULA) isn't good enough. "If your advertising giveth and your EULA taketh away," she said, "don't be surprised if the FTC comes calling.

She stressed that it was not permissible for companies to play Lucy to consumers' Charlie Brown, holding the football and promising that this time she won't yank it away at the last minute. Promising "if you buy our DRM downloads, we won't shut down the authentication serves this time," she said, wasn't enough."

........ another quote...

"One thing that received general agreement from all parties was that better disclosure was essential. Even the pro-DRM side stressed that nothing is gained for an industry by angering its customers, and that customers get furious about things like the SonyBMG rootkit."

Very interesting. Mary Engle sounds like she takes her position seriously and isn't just taking up space. Her analogies are amusing, as well. We'll be waiting with baited hooks to see how this story unfolds.

The following is a quote from the above... please go read his full story.

"Unrealistic Expectations

The good news is that the FTC is now more aware than ever of the difficulties to consumers implicit in Digital Rights Management (especially since they received over 800 public comments, which they admitted during the meeting they had not managed to work all the way through yet). The bad news is that it is not the FTC’s brief to adjudicate matters relating to the Digital Millennium Copyright Act and fair use, or even anti-trust concerns relating to non-interoperable DRM.

The FTC is chiefly concerned with unfair and deceptive business practices. (For example, in the other big FTC story of the day, the FTC announced yesterday it was suing Dish Network for making telemarketing calls to people listed on the national Do Not Call Registry.)

If companies make deceptive statements in advertising about the limitations of their DRM, the FTC will look into it. If companies release DRM that harms the consumer (as in the infamous Sony rootkit debacle), they will investigate and possibly sanction. But they can’t do anything to let you copy DVDs to your video iPod when the DMCA forbids it. Talk to Congress about that.

That being said, the meeting was of great interest just for the open discussion of DRM among big guns from both consumer-advocacy and commercial trade groups. Anyone who did not realize DRM was a contentious issue before would certainly have gotten an earful. "

Will someone please explain in simple non-jargon language what this means? And what's this about Sony BMG? Tim signed up for that, and it took me forever to get our required purchases and then close the account.

EDIT: Never mind. I Googled "Sony rootkit" and got plenty of answers. I'm going to proceed with confidence, seeing as how the computers in our house are post-2005, and the anti-virus software probably took care of any rootkit probs that may have existed. All of those albums we got from them have been copied onto computers and iPod's, without any sort of restriction issues.

What they can do is spank companies that do bad things with DRM. (Well, worse things than normal anyway.) Like, say, outright lie in advertisements about what their DRM will allow, or make DRM that does bad things to your computer (Sony rootkit).

By and large, the Town Hall meeting ended up being a lot of ranting about aspects of DRM that the FTC can't do anything about. (And I'm as guilty as anyone of that, with my Mobi/Amazon question.) In the end, it's a pity that the FTC can't do anything about those aspects. But on the bright side, at least a lot of the problems with DRM got a good public airing, and people might at least feel a little better their views have been heard.

What they can do is spank companies that do bad things with DRM. (Well, worse things than normal anyway.) Like, say, outright lie in advertisements about what their DRM will allow, or make DRM that does bad things to your computer (Sony rootkit).

By and large, the Town Hall meeting ended up being a lot of ranting about aspects of DRM that the FTC can't do anything about. (And I'm as guilty as anyone of that, with my Mobi/Amazon question.) In the end, it's a pity that the FTC can't do anything about those aspects. But on the bright side, at least a lot of the problems with DRM got a good public airing, and people might at least feel a little better their views have been heard.

While the FTC can't make DRM illegal, nor the DMCA, it can, I think make the current model essentially unworkable. Essentially, they seem to be saying that DRM has to be set up such that when someone buys a digital product they must know about any DRM involved and further, that companies essentially can't stop supporting older DRM schemes if they choose to move on to new ones. Essentially, it might make the current model of DRM used by Mobi/Kindle, Adobe Digital Editions and others unappealing. How would you like to be Amazon and told that if you decide to chenge DRM 5 years from now, you can't orphan the users of the existing DRM? Maybe it will make more companies look at eReader style DRM.

Will someone please explain in simple non-jargon language what this means?

The FTC doesn't have a lot of jurisdiction to really change DRM or what restrictions DRM can implement. All they can really do is hold companies accountable for "do what you say, and say what you do". There are other parts of the government who are responsible for what DRM is/isn't allowed to do.

Bascially, they're saying that "we understand that there are lots of issues that people want to talk about here with regards to what DRM can and cannot legally do, but this is the wrong place to talk about it. We're just here to make sure that companies are disclosing what their DRM does before a consumer buys the product. If a company doesn't disclose what restrictions their DRM places on the consumer, or falsely represents them, then we will step in. If you don't like the restrictions, or you don't think they're legal, complain to somebody else."

One point that was brought up several times during the meeting was that there needed to be better consumer education on what DRM is and the restrictions it can cause. But, as panelists noted, DRM is really a hard thing to explain to the average, not-very-tech-savvy consumer.

As someone discussing the event as it happened on Twitter pointed out, we've still got a nontrivial percentage of the American public unprepared for the DTV changeover—which has essentially already happened in a lot of markets. And that's a relatively simple matter of "You need to stick this magic box on your TV set or TV won't work no more."

Every day there's a new story of someone buying an e-book only to find he can't move it to a different computer or e-book device. How do you explain to these people what it is they're buying? How do you make the "buy vs. license" distinction clear?

I am computer literate and pretty handy with electronics, but nothing anywhere near the skill and knowledge you guys have. Also, I was reading ebooks since 2002. Until I joined MR and got smarter about ebook tech, I had never heard of DRM. It is just not out there in the general water cooler conversations.

Like many, I sing a little song in my head when people discuss things with lots of abbrev and jargon. Now, if in 2002 someone said to me, "Hey You. Did you know that ebooks contain hidden codes so that you can't copy them?" I would have said "No. Tell me more."

I am computer literate and pretty handy with electronics, but nothing anywhere near the skill and knowledge you guys have. Also, I was reading ebooks since 2002. Until I joined MR and got smarter about ebook tech, I had never heard of DRM. It is just not out there in the general water cooler conversations.

Like many, I sing a little song in my head when people discuss things with lots of abbrev and jargon. Now, if in 2002 someone said to me, "Hey You. Did you know that ebooks contain hidden codes so that you can't copy them?" I would have said "No. Tell me more."

As it is now, however, DRM is not even a known phrase to the masses.

Yea, but at least "no copy" is intended to prevent people from circumventing copyright laws. (Never mind whether it works) How about I am going to use DRM to make sure you can only buy your eBooks from the company that sold you the reader. This has nothing to do with copyright and I believe, according to the Sherman act, it is illegal. Hopefully the FTC can address this.

And just stuffing the disclosure into the fine print of an End User License Agreement (EULA) isn't good enough. "If your advertising giveth and your EULA taketh away," she said, "don't be surprised if the FTC comes calling.

Yeah we will see!

99% of the time the government is just running around upholding ludicrous copyright laws which corporations spend millions of dollars upholding and extending. Let's see them help and protect consumers of that media for a change.

The average consumer is not too terribly clueful about copyright law in general. Copyright 101 should be a required course.

The basic problem is that fair use is by definition a nebulous concept. How do you tell consumers what they can or can't do with a copyrighted text unless it is a case the courts have already taken up?